Friday, October 28, 2011

My View

Random ruminations from your resident curmudgeon...

The Occupy Wall Street protests that have spread around the country have demanded a lot of things, but the centerpiece of their irritation with America is income inequality and the desire to see said income redistributed. Let me say right now that there is greed and corruption in America's business community. Always has been, and always will be. That statement is not to dismiss this condition, but to acknowledge it. That being said, the question that I have to the OWS protesters is simply this: is the total reason for income inequality in this country because of greed, corruption, or gaming the system? Perhaps there are other factors at play, factors that weigh even more heavily on income inequality in this country. As the global economy has expanded and created new opportunities, one has to ask if our educational system has kept up and continued to turn out graduates that are equipped to compete in the global economy? (Answer: No). One has to wonder if the public policy of bailing out institutions and companies that make horrible business decisions, like GM, Chrysler, and numerous banks, has spilled over to personal decisions as well (Answer: It Has, and it is the wrong decision in both cases). Taking on enormous student debt to get a degree that provides no marketable skills was the choice of the student, but I shouldn't be asked to pay off your student debt because of that unfortunate choice. The OWS crowd decries "income inequality" and demands that incomes and wealth be redistributed as a solution to this problem (Answer: It Has Never Worked). Cut to the core of the OWS demands and what you find are demands that are nothing but income redistribution, which has ALWAYS stunted an economy and lowered a country's standard of living.
While the OWS has raised some valid points, their focus is mis-directed and will not provide for long term economic growth in this country that will benefit everyone.

I think that auctioneers are proof that white guys could rap if they tried hard enough.

Halloween is a time where we enjoy some scary moments. Here is one that may have escaped your view, but should scare the daylights out of you. Right around Halloween, the National debt of our country will surpass our Gross Domestic Product (GDP). Now I know that doesn't necessarily make you quake in your boots as if Jason is chasing you with a chainsaw or if there was a socialist in the White House... wait...what? Anyway, here is the significance of this event: the world notices and you can count on interest rates going higher as we have to pay more to purchasers of our debt to entice them to take on more risk by buying our bonds. This affects credit card debt, mortgage debt, and most importantly the amount of money that our country has to pay in the form of interest payments to our creditors. As a nation, we have enjoyed the benefit of a lower rate environment, but with this change in condition, I would look for rates to rise in the near future. This means more of our budget will be spent on debt service and it will crowd out other spending. Look for quite a battle in Congress as we are forced to cut domestic spending on social programs as well as defense spending. It will be gruesome and scary.

My life is like a Lamborghini. It's going way too fast and costs too much money.

Have you heard of HARP? This is the latest scheme...uh, program from Washington, and it stands for Home Affordable Refinance Program. The program is designed for home owners that want to refinance their house to take advantage of the current low interest rates but cannot do so because their house isn't worth what it was when originally purchased. This is a condition in which many homeowners find themselves due to the collapse of home prices in 2008. This is all well and good, but someone has to pay for this program. HARP falls under the auspices of the Federal Housing Finance Agency, and they have said that they are not paying for these refinances, which are supposed to be without fees to qualified customers of the participating financial institutions. Fannie Mae, who ultimately buys the refinanced mortgages, says they are not paying for this program. Instead, the said the Treasury Department is paying for the program. Treasury says, uh... no we are not. Here is the point: this is typical of Washington programs that grow dramatically and cost the taxpayers billions of dollars and have little to no oversight. Ultimately, we all know who pays for these programs, and that is you and me.

My wife treats me like a god. She doesn't know I exist until she wants something.

And that, my friends, is my view.

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